Strabag International GmbH v Ukutulu Limited, Miscellaneous Application No. 0095 of 2025 (arising from Civil Suit No. 0042 of 2025), High Court of Uganda at Arua, ruling of Hon. Lady Justice Harriet Grace Magala delivered on 6th July 2026.

1.0  Background

Ukutulu Limited sued Strabag International GmbH and two other defendants in Civil Suit No. 0042 of 2025, seeking a declaration that it is the lawful occupant of an exploration licence area in Adjumani and that the defendants are trespassers on that area.

The parties had earlier executed an Agreement for Consent to build and operate a stone quarry dated 26th December 2020. Clause 10.1 of that agreement provided that all disputes arising out of or in connection with the agreement would be submitted to the International Court of Arbitration of the International Chamber of Commerce and finally settled under its rules.

Strabag International GmbH applied to strike out the suit and refer the dispute to arbitration. Ukutulu Limited opposed the application on two grounds: that the applicant had no locus standi because it had not filed a written statement of defence, and that the arbitration clause could not be invoked because the agreement had expired.

2.0  The Issue

Whether the court had jurisdiction to hear Civil Suit No. 0042 of 2025, or whether the dispute had to be referred to arbitration.

3.0  The Decision

Referral to arbitration is mandatory. The court held that referral under section 5 of the Arbitration and Conciliation Act, Cap. 5 is mandatory and not a matter of discretion for the court or the parties. Once a valid and enforceable arbitration agreement is found to exist, the court’s jurisdiction is ousted and the dispute must go to arbitration.

The three elements. Following British American Tobacco v Lira Tobacco Stores, the court asked whether there was a dispute, whether the dispute was arbitrable and whether it was governed by a valid and enforceable arbitration agreement. All three were satisfied on the record.

Separability. The court held that an arbitration clause is independent of the contract in which it sits. Relying on section 16 of the Act, and on the decisions in British American Tobacco and National Social Security Fund v Alcon International Ltd, it confirmed that arbitration clauses survive the expiry of the main agreement. The expiry or invalidity of the underlying contract does not render the arbitration clause inoperative.

Nothing rendered the clause inoperative. An arbitration agreement is incapable of being performed only where it could no longer be performed even if both parties were ready, willing and able to perform it. Nothing on the record suggested that the clause was invalid or inoperative, and the respondent was bound by it, having freely executed the agreement that contained it.

The written statement of defence. The objection on locus standi failed. The defence had been filed within the thirty days sought and was validated and admitted to the court record under section 98 of the Civil Procedure Act and section 37 of the Judicature Act.

4.0  The Orders

• Civil Suit No. 0042 of 2025 was struck out with costs to the defendants.
• Civil Appeal No. 010 of 2026 was struck out as overtaken by events.
• The temporary injunction issued in Miscellaneous Application No. 86 of 2025 was vacated, the main suit having been struck out for being incompetent.

5.0  Key Takeaways

An expired contract does not release a party from arbitration. Where a dispute arises after the term of an agreement has run out, the arbitration clause still governs how that dispute is resolved.

Plead the arbitration clause early. Section 5 requires the application to be made after the filing of a statement of defence. A party that litigates the merits instead risks being taken to have abandoned the clause.

Courts will not rescue a party from its own bargain. The courts read these clauses as written and enforce them strictly. Freedom of contract, not convenience, decides the forum.

Draft the clause with the end in mind. The seat, the rules, the number of arbitrators and the language should be settled when the contract is negotiated, not when the dispute arises.

Review dispute resolution clauses in long running project contracts. Construction, mining and infrastructure agreements often outlive their stated term through variations, extensions and holdover arrangements. The arbitration clause travels with them.

AF Mpanga Advocates acted for Strabag International GmbH in this application.

DISCLAIMER

This alert is provided for general information only. It does not constitute legal advice and should not be relied upon as such. Should you require advice on any matter raised in this alert, please contact the author or your usual contact at AF Mpanga Advocates.